long position
Owning an asset with the expectation that its value will rise over time, allowing you to profit by selling it at a higher price.
Example
“He took a long position in Tesla, buying 100 shares at $200 hoping to sell them above $300.”
Memory Tip
LONG = you hold it LONG TERM hoping it goes UP.
Why It Matters
Understanding long positions helps you make informed investment decisions about whether you want to bet on an asset going up in value. This concept is fundamental to building wealth through investing, as most traditional investment strategies involve taking long positions in stocks, bonds, or other assets.
Common Misconception
Many people think a long position means you must hold an asset for a long time period, but it actually just means you own the asset and expect its price to rise regardless of how long you keep it. You could take a long position and sell it days, weeks, or months later depending on your goals.
In Practice
If you buy 100 shares of a company at 50 dollars per share, you have a long position worth 5000 dollars. If the stock price rises to 65 dollars per share, you can sell your position for 6500 dollars, making a profit of 1500 dollars before costs and taxes.
Etymology
From the trading floor expression 'going long' — holding a position expecting gains.
Common Misspellings
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See Also
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